Talk:Qualified Subchapter S Trusts (QSSTs)

From TaxAlmanac

QSST--how does it file a return?

A QSST (Qualified SubS Trust) will be filing a Form 1041. Only asset/income is from a Sub S corporation. Only trust expense is tax preparation fees. Sub S distributes out cash less than reportable K-1 taxable income (distributes only a little more than the tax due on the k-1 income)

1) Does the QSST report total amount of K-1 income less trust expenses on 1041 page one? Then show a distribution deduction for Cash Distributions less trust expenses? (QSST rules say that Trust Accounting Income must be distributed to beneficiary to qualify for QSST. OR, should a QSST return show nothing on page one and simply distribute net cash to beneficiary

2) Practically speaking, the trust needs to be able to keep a base amount in cash account. If trust is required to distribute all Trust Accounting Income, then technically it would always have to zero out the cash account -- not possible. Anyone have experience with this issue?